The chief executive of Whole Foods Market apologized to shareholders on Tuesday for anonymously posting comments about his company on the Internet as the organic and natural foods grocer said the U.S. Securities and Exchange Commission had launched a probe into the matter.
News of the SEC probe comes a week after court documents filed by the U.S. Federal Trade Commission revealed that Whole Foods Chief Executive John Mackey posted messages on a Yahoo chat forum under an alias for years.
In the postings, Mackey talked up his company while predicting a bleak future for Wild Oats Markets, the rival his firm is trying to acquire.
"I sincerely apologize to all Whole Foods Market stakeholders for my error in judgment in anonymously participating on online financial message boards," Mackey said in a statement on Tuesday. "I am very sorry and I ask our stakeholders to please forgive me."
Last week, Mackey had defended the postings, saying he "posted on Yahoo! under a pseudonym because I had fun doing it. Many people post on bulletin boards using pseudonyms."
Corporate governance expert Nell Minow of the Corporate Library said she did not expect him to remain CEO for long.
"The fact that somebody has twisted his arm into saying he's sorry just isn't enough," Minow said.
The FTC cited Mackey's postings as part of its lawsuit aimed at blocking Whole Foods' planned $565 million acquisition of Wild Oats on the grounds the deal would hobble competition and increase prices for consumers.
SEC staff contacted Whole Foods late on Monday, the company said, adding that it was cooperating with the probe and would not make any further comments while the inquiry is pending.
The Austin, Texas, company also said its board of directors formed a special committee to investigate the postings. Whole Foods hired Munger, Tolles & Olson to advise it in its internal investigation.
Minow said the SEC would likely be looking at whether Mackey broke any disclosure rules in his postings and at whether his comments constituted an attempt to manipulate the share prices of Whole Foods and Wild Oats.
"When you are the CEO of a public company you no longer have the luxury of communicating in any way you like about what's going on at your company," she said.
The internal company probe would focus on Mackey's "monumental poor judgment," she said.
